A EU directive on bank deposit guarantee schemes is expected to be transposed into the island's legislation by the end of the month as Cyprus faces hefty fines if it continues to delay its approval.

According to Demetris Lysandrou, State Law Office official, the directive should have been approved by last July and that Cyprus has already received a warning over the delay.

Directive 2014/49 effectively updates the original deposit guarantee schemes directive adopted in 1994. The Council decided that the level of deposit protection should be gradually but quickly increased in the EU.

A March 2009 directive required member states to increase coverage of their deposit guarantee schemes - first, to at least €50,000, and then, to a uniform level of €100,000 by the end of 2010.

The new directive confirmed that €100,000 is an appropriate level of protection and provides that the deposit guarantee schemes must be able to fund at least 0.8 per cent of covered deposits by 2024.

The scheme will be financed by a country's banks according to their size but there are also risk-based criteria. A new directive ensures that banks will have to pay in to the schemes on a regular basis, and not only after a bank failure.

Source: Cyprus Mail

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According to a press release issued by the Economics Research Center of the University of Cyprus (CypERC) Cyprus` economic climate did not change in September 2015.

The Economic Sentiment Indicator stood at 106.9 points in August 2015. It remained unchanged in September due to concurrent positive and negative changes in its components. It should be noted, that there was an overall improvement of the economics in various fields and among the consumers, with the exception of a marginal decline in services.

The ESI stagnation is described by the deterioration of expectations in services, the present situation in the manufacturing sector, the reduced likelihood of households` savings and the development of the remaining aspects comprising the ESI.

Source: Famagusta Gazette

Hermes Airports spokesman Adamos Aspis announced that Hermes Airports in cooperation with the ministry of transport, communication and works will be inviting an expression of interest for the old Larnaca and Paphos airports grounds. The official announcement will be published within the next few days.

Aspris explained that the invitation would be issued not only in Cyprus but also abroad, in an attempt to drum up investor interest. Both airport grounds offer a number of attractive benefits, including being next to the two new airports, being a central hub for the eastern Mediterranean as well as host of potential business agreements. The main goal of this project is to create new jobs. The bids for the old airport grounds are expected to be submitted by the end of 2015.

The old airport grounds are included in the airport operation contract signed with the state, which expires in 2031. 

Source: Cyprus Mail

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The International Monetary Fund reported that Cyprus reform program continues to be "a success" and has approved the disbursement of another 126 million euro for bailed-out Cyprus.

According to the IMF, the total disbursements so far amount to around 882 million euro from a contribution of around 1 billion euro. Another 9 billion euro is being provided by the European Union's bailout fund.

Mitsuhiro Furusawa, the IMF deputy managing director, said Cyprus' economy performed better than expected in the first half of the year. He advised to put more efforts to deal with a problem of bad loans and incautious spending due to the high public debt; and to speed up the process of privatizations.

Source: St. Louis Post Dispatch

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Cyprus Parliament has approved a law regulating the establishment, operation, supervision and control of casino resort in Cyprus.

The integrated operation should include luxury accommodation, entertainment, gaming and dining of world standard.

The law will provide accommodation exceeding the requirements for a five-star establishment with at least 500 luxury rooms, at least 100 gaming tables and at least 1,000 gaming machines.

The casino concession will be valid for 30 years and will enjoy 15 years of exclusive operation.

Cypriot authorities have said they expect up to 15 expressions of interest, among them four casino giants from Las Vegas, Malaysia and Macao: MGM and Caesars, Genting and Kezner.

Application submission date is 18^th December 2015. The selection of the successful bidder should be completed within 45 days since the due date of application submission.

Source: Famagusta Gazette

Government interference with the banking sector in Cyprus resulted in irreversible losses in the amount of 10.5% of the island`s GDP, a European Central Bank report says.

According to CNA, the report explains the Cypriot case as the "worst case" in terms of government support recovery.

The report states that over the period 2008-14 the accrued gross financial sector assistance in the euro area amounted to 8 per cent of euro area GDP, increasing currency union`s debt by 27 percentage points between 2008 and the end of 2014.

The European Central Bank report titled "The fiscal impact of financial sector support during the crisis" said Cyprus suffered the third largest fiscal impact following Ireland and Greece.

Source: Famagusta Gazette

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Cyprus and Vietnam have signed a mutual agreement on the elimination of visas for holders of diplomatic and service passports.

Ioannis Kasoulides, Cyprus foreign minister, met with Bui Thanh Son, Vietnamese Deputy Minister of Foreign Affairs, to complete the deal on 11^th September.

The agenda of the meeting consisted of several topics: bilateral relations, the preparation of the official visit of the President and Foreign Minister of Vietnam to Cyprus in December, progress in the Cyprus problem, the economic and political developments in Asia and Vietnam`s relations with the EU.

Source: Famagusta Gazette

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Cyprus and Egypt authorities report that they are proceeding with a natural gas deal providing for the purchase of up till now uncertain volume of Cypriot gas by Egypt.

Yiorgos Lakkotrypis, Cypriot Energy Minister said that feasibility studies were concluded and specialists are determining now the cost of seven alternative options to transfer the gas. He added that the next stage in the deal will be the conclusion of commercial agreements.

The Aphrodite field contain 5 trillion cubic feet of natural gas and Egypt said it is willing to buy as much gas as could be made available. The plans are unaffected by the discovery of a giga gas field in the Egyptian continental shelf, not very far from Cypriot gas plots. The Zohr discovery contains an estimated 30 trillion cubic feet of natural gas.

Source: Famagusta Gazette

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The law became active when it was published in the official gazette on the 3^rd September, after parliament passed it in a rare unanimous vote. The law covers transactions up to the end of 2012.

Cyprus enacted legislation releasing thousands of Cyprus home buyers who had been "trapped" by property sellers' debts to banks, and at the same time fulfilled a prior action for the release of more assistance money by international lenders.

The legislation is designed to enable owners who have paid up, to obtain a legal title deed to their properties which could not be issued up to now, because of bank mortgages or tax dues to the state by developers.

Passage of the law was the last prior action required by the Eurogroup and the International Monetary Fund (IMF) for the release of the next tranche of bailout assistance, amounting to 500 million euro (555 million U.S. dollars).

Source: Famagusta Gazette

Moody's notes in a credit outlook bulletin that the Bank of Cyprus is making appropriate progress in implementing its restructuring plan.

Moody's points out that the BoC repaying an additional €500 million of Emergency Liquidity Assistance during July and August, reducing its stock to €5.4 billion or 23% of assets, will lower the bank's funding expense and strengthen confidence in its ability to continue implementing the restructuring plan it agreed on with the European Union in 2013.

According to Moody's, since April 2013, when ELA funding peaked at €11.4 billion, the BoC has repaid around €6 billion. Moody's states that during the second quarter of this year, BoC's deposits in Cyprus stabilized at €11.6 billion, and as assets declined by €1.4 billion, deposits increased to 53.7% of assets from 51% in March 2015.

Furthermore, the agency refers to notice letters sent by the bank to around 25 defaulted corporate borrowers with €84.9 million of total loans outstanding regarding foreclosure proceedings on their real estate collateral.

Conversely, Moody's also mentions that although the ELA repayment is ahead of plan, we nevertheless expect BoC's balance sheet repair process to be lengthy given its high stock of NPLs, and we expect high provisions and write-offs to burden the bank for years.

Source: SigmaLive

Cyprus News Agency reported that the Parliament is expected to approve the first bill aimed at creation of a company governed by private law with the state owing 100% of its shares and the company assuming the commercial activities of CyTA. The approval of the bill is a precondition of an agreement signed with the troika.

In January, the two firms were chosen as consultants for the privatization process to be carried out for Cyta: Citigroup Global Markets Limited and the consortium PWC.

Legislation aiming at turning Cyprus telecoms provider CyTA into a private concern should be finalized in Parliament by December at the latest.

Source: Famagusta Gazette

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Based on the preliminary data on the General Government accounts for the period April-June 2015, compiled in accordance to EU concepts and definitions, total revenue is estimated at €1,629.0 million (1.4% increase as compared to the corresponding period of 2014), while total expenditure amounted €1,641.2 million (3.3% raise).

The Cyprus` Statistical Service publicized that the state has posted a fiscal deficit of €12.2 million in the second quarter of 2015 in comparison to a €16.8-million surplus in the corresponding period of 2014.

The fiscal deficit in the first quarter is reported at €19 million. The deficit for the first six months of 2015 stands at €31.2 million.

Source: Famagusta Gazette

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Cyprus formally declared its economy to be out of recession, less than two and a half years after it was bailed out by the Eurogroup and the IMF.

Cyprus entered into an economic adjustment program when it signed a 10-billion-euro financial assistance accord in March 2013, after 11 consecutive quarters of recession that forced it out of international markets.

Averof Neophytou, Governing DISY party leader, said official estimates show that the growth at the end of the year will not just be a meagre one, but might reach a 2.0 percent, against a recession of 2.5 percent in 2014.

Government spokesman, Victor Papadopoulos, added "It means that we are on the road to development, which will gradually lead to the reduction of unemployment and non-performing loans".

Unemployment currently is estimated to be 15% but is going down. In the meantime, non-performing loans are the biggest headache for banks, which have to handle bad loans amounting to 26.9 billion euros, or 45.85 percent of total loans.

Source: Famagusta Gazette

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Cyprus` Statistical Service announced that according to a flash estimate the GDP growth rate in real terms during the second quarter of 2015 is positive and estimated at 1.2% in comparison to the 2^nd quarter of 2014.

Based on seasonally and working day adjusted data, GDP growth rate in real terms is estimated at +0.9%.

The acceleration of the economy`s growth rate is a very encouraging development, Finance Minister Harris Georgiades has said. He stressed that "with confidence and seriousness, away from dogmatic denial, we continue on the path of reform, consolidation and change that Cyprus needs.

According to the estimate, positive growth rates were recorded in manufacturing, trade, hotels and restaurants, transport, communication, the professional, scientific and technical activities and administrative and support service activities as well as the financial service activities.

On the contrary, negative growth rates were recorded in construction, electricity, the arts, entertainment and other service activities as well as the activities of households as employers.

Source: Cyprus News Agency

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European Commission funding granted Cyprus €74.9 million for handling migration programs.

European Commission has contributed a 2.4-billion-euro fund to be distributed for the 2014-2020 period to countries which are facing a crisis because of the influx of migrants, mostly from war-torn regions.

The EC report published this week said Cyprus would receive €32.3 million under the Asylum, Migration and Integration Fund and €42.6 million under the Internal Security Fund.

EU member states face unprecedented challenges in the fields of migration and security and the Commission is taking action in a spirit of solidarity. The money allocated to Cyprus will be used for improving asylum and integration procedures and strengthening security measures, including implementation of border management and enhancing its operational capacity for fighting against terrorism and effectively managing security-related risks and crises.

Cyprus is the most south-eastern part of the European Union and in past years has been a refuge for thousands of migrants seeking a better life. But unlike Italy and Greece which are used by migrants as an entry point to EU, Cyprus was the final destination for most migrants in search of security and work.

Source: Famagusta Gazette

Commission for the Protection of Competition permitted Bank of Cyprus to sell a 65% controlling stake in the holding company of the Thomson Sensatori Aphrodite Hills Resort to a group of US-based investors, with an estimated profit of €58.5 m.

Transaction details are concealed. Bank of Cyprus will retain a 10% stake in the holding company which is involved in the development and sale of residential property and the ownership and administration of a championship 18-hole golf resort and a 290 room hotel in Aphrodite Hills Resort, Paphos.

The portfolio of non-core assets of BOC is estimated at €3.5 bln. The sale is part of the bankâ€â„¢s strategy to dispose of non-performing assets.

Source: Financial Mirror

Cyprus and Iran opened doors to new investment opportunities and trade markets as they signed an avoidance of double taxation treaty this week.

It is of high economic and political importance to Cyprus to further expand and improve the network of double taxation agreements so to support and attract foreign investment.

Ali Askari, Iran's Tax Affairs Organisation Director, believes that this agreement will further develop collaboration between the two countries in the financial and business sector. Askari mentioned that Iran could act a bridge between Cyprus and East Asia.

The avoidance of double taxation treaty with Iran opens up new horizons for Cypriot companies in the emerging market of Iran. One of the prominent cooperation direction might be maritime services, as Iran has the largest tanker fleet in the world and the Cyprus flag could benefit from this fleet.

Source: Cyprus Mail

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British expats and other Barclays account holders in Cyprus will have their accounts closed by the bank on 11 September 2015 unless they contain a minimum deposit of £100,000.

The bank said as a consequence of a de-risking programme that was put in place at the end of 2013 to review and reduce the number of countries Barclays operate in, the minimum threshold will apply not only to Cyprus but also to Malta and Greece, although out of consideration for the current situation Barclays is not closing accounts for Greek residents at this time.

Barclays provide expat services in many countries worldwide, however, bank takes serious action to reduce their risk associated with operation in certain countries. As a result of this decision and in line with the strategy a new minimum threshold for customers resident in Cyprus is introduced. Clients will need to maintain £100,000 across their accounts with Barclays to keep their account in the bank.

Barclays say they are focusing on a core set of 70 markets globally, where they believe they have the most knowledge and experience.

Source: Cyprus Mail

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Troika of Cyprus' international lenders are presently carrying out an important quarterly review of the island's economic adjustment program giving emphasis to banking issues and public sector reforms.

According to the reports the sale of mortgages to third parties, such as hedge funds, and the issue of Title Deeds were among the actions Cyprus had to take before the next tranche of financial assistance was released.

Cyprus News Agency reported that to receive next tranche Cyprus must enact legislation allowing the sale or transfer of loans to third parties and approve a bill, designed to allow people who have paid for their house in full to get the title deed, which they currently cannot because of developers' failure to pay their obligations to banks.

Enactment of the Title Deeds bill, in the meantime, has been delayed due to the summer holidays; it is planned to be discussed on 3^rd September by the House plenum.

Source: Cyprus Property News

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The secretary of the transport ministry and chairman of the CPA, Alecos Michaelides, stated that there were 70 inquiries and a total of 33 written expressions of interest for the Limassol port commercialization tender.

The evaluation of all 33 expressions of interest will be completed by early August. The selected operators will be shortlisted and asked to submit formal bids by the end of November. The process is expected to be completed by the first quarter of 2016.

Throughout this time, there will be meetings with the project team and consultants from the ministry of transport with the bidders who will be given any information they need for the preparation of the bids for 3 sections of the port:

• the container terminal (license duration 25 to 30 years)
• the provision of maritime services (license duration 25 to 30 years)
• the multi-purpose passenger terminal(license duration 10 to 20 years).

Limassol port's commercial operations are to be privatized under a deal between the government and international creditors.

Source: Cyprus Mail